If the Greek results reintroduce additional risks and fears of
financial contagion across weaker Eurozone countries, then this
might also presumably weaken the Euro because of the perception
that it may force the ECB to be more accommodative. One
might jokingly think, on the contrary, such heightened contagion
might influence the Federal Reserve Board more than the ECB.
This, however, may not be a joke. As I noted last week, a
prominent US thinker remarked at our GSAM Growth Market Summit
that the Italian bond yield represented the biggest re-election
risk for President Obama. It would be ironic, if not
improbable, that a major escalation of Euro area financial
contagion influenced the Fed more than the ECB.

O'Neill also discussed the potential outcomes for the French
election and its impact on the euro:

The French election, in some ways, is more “fundamental” to the
future European policy landscape given the importance of the
Franco-Germanic alliance to the Euro project. President-elect
Hollande has made it clear in advance that he believes that
European economic policy, and ECB policy, should give greater
priority to supporting economic growth. Of course, his current
German counterparts do not share those thoughts, but many other
countries probably do. Although it is true that the ECB is
independent, and it might be true that, if elected, President
Hollande might not pursue aggressive actions on such matters, at
the margin, his appearance on the scene is probably not a EUR/$
positive.

His outlook for the euro:

So here are most of the apparent EUR/$ issues that are likely to
remain relevant. It is possibly the case that the Euro may
continue to trade in a 1.29-1.35 range for quite some time. It
increasingly seems to me that 1.20 is eventually more likely than
1.40. Can we all wait for eventually? There are certainly lots of
other things that remain interesting.